The Minnesota Commerce Department says a now defunct Minneapolis nonprofit owes the state $245,000.

The Commerce Department released an audit that found Community Action of Minneapolis misspent $143,000 on unauthorized consultants and thousands of dollars more on spa visits at board retreats, unnecessary out of state travel and improper administrative expenses.

The Commerce Department submitted the claim to a court-appointed receiver who is tasked with winding down the assets of Community Action of Minneapolis. The receiver, Michael Knight, reported in a court filing that he negotiated the total cost of the claim down from $283,000.

Knight is recommending that a Ramsey County District Court judge make the payment.

“At this point, we expect to be paid in full on the claim,” Commerce Department spokesman Ross Corson said.

The audit also found that there was a mass deletion of computer files just days before the state raided the offices of Community Action of Minneapolis and shut down the organization.

Auditors found that critical information from Community Action’s computer systems was missing and that there were modifications to a database dealing with weatherization payments. Corson said the department is still investigating how and why the files were deleted and altered.

The Commerce Department contracted with Community Action of Minneapolis to provide energy assistance and weatherization funds to low income Minneapolis residents.

The Commerce Department’s review of Community Action of Minneapolis is the second state audit that found misspending by the non-profit.

The Minnesota Department of Human Services released a scathing audit last August that found the nonprofit’s former CEO Bill Davis misspent $871,000 on out of state travel, car payments and golf. The Department of Human Services is asking the court to require the receiver to return $507,000 to the state.

Corson said the Commerce Department’s civil investigation into Community Action of Minneapolis is continuing.

Court records have also shown that the FBI is investigating the nonprofit.

Meanwhile, the Legislative Auditor says the Commerce Department acted appropriately in its oversight Community Action of Minneapolis. MPR News reported last year that some staffers were concerned that Commerce Department leaders were being too lenient on the nonprofit.

Brad White of the auditor’s office said a review found Commerce Commissioner Mike Rothman and his staff acted appropriately in their oversight of how Community Action spent energy assistance money.

“We went through e-mail and other correspondence and didn’t see any indication of leniency,” White said. “In fact, we saw that they were continuing to monitor them to get them correctively in the right direction in terms of compliance with the federal requirements.”

Corson characterized the review by the Legislative Auditor as an “exoneration.”

The education committee chairs in the Minnesota House and Senate are both planning to hold hearings in the coming months on the state’s persistent achievement gap in schools, which was again highlighted in the latest round of statewide testing.

Rep. Jenifer Loon, R-Eden Prairie, said in a news release that the results show Minnesota is falling short of its goal to provide every student with a world-class education. Loon, the chair of the House education finance committee, also said that too many children are falling behind academically.

“The status quo is failing the next generation,” Loon said. “We owe it to our children to consider all avenues and educational reforms to remedy this problem and improve student learning.”

Loon said she plans to hold hearings this fall to “explore innovative solutions.”

The chair of the Senate education committee raised similar concerns.

Sen. Chuck Wiger, DFL-Maplewood, said in a separate news release that the test scores show there is more work to do to help students move forward.

“The status quo is not good enough,” Wiger said. “We must grow if we are going to succeed.”

Wiger noted that the MCAs provide an incomplete picture of student progress. He said additional data due out in September will show which students are making progress.

Wiger said he will hold hearings before the next legislative session begins in March. He also plans to visit schools around the state to discuss testing issues.

“I consider it my responsibility to investigate this often-frustrating testing environment and hope to come to the Legislature with ideas to make this process less stressful for students and more effective at showing us what still needs to be done in our schools,” he said.

DFL Gov. Mark Dayton is proposing a special legislative session sometime next month to consider an emergency financial aid package for resorts and other businesses in the Lake Mille Lacs area. Read more →

Rep. Betty McCollum said she wants the U.S. Attorney and the U.S. Fish and Wildlife Service to investigate whether a Minnesota dentist violated any laws when he killed Cecil the Lion in Zimbabwe. Read more →